You've Got Surveys

Innovative approaches to market research highlight the
industry's move onto the Web.

When Richard Hatch, the million-dollar winner of CBS's Survivor
contest, joined his fellow castaways for a live reunion show,
following the airing of the final episode this past August, Bryant
Gumbel had some bad news for him: The viewing public did not
approve of his victory. How did Gumbel know this, just minutes
after the end of the series' broadcast? From a Web survey taken
immediately following the show. "This is the first time I've seen
survey results actually applauded," says Kathleen Frankovic,
director of surveys at CBS News, referring to the audience's
reaction at the post-show reunion of the original contestants.

CBS's Survivor survey illustrates the benefit of speed that the
Web can offer companies conducting market research online. An
increasing number of marketers are recognizing this, and other
benefits, and are moving more of their research onto the Web.
According to figures compiled by Inside Research, an industry
newsletter, the value of online research conducted by 29 of the
largest market research companies, has grown from just $3.5 million
in 1996, to $254.8 million this year (these firms represent 90
percent of industry revenue in this arena). While this is still a
small percentage of the 1999 total U.S. market research industry
revenue of $4.8 billion, (as reported by the American Marketing
Association's Marketing News), it represents triple-digit
percentage growth in each of the past four years for online
research.

The advantages of using the Web include lower costs, the ability
to survey hard-to-reach respondents, and of course, speed.
Traditional forms of research have been plagued by decreasing
levels of cooperation from the public, and the refusal rate of
people asked to participate in telephone or in-person surveys has
increased from 49 percent in 1978, to 60 percent in 1999. With Web
surveys, people can be invited to participate via e-mail, and then
decide when to complete them, at their convenience. What's more,
the Web opens up the use of rich media, such as streaming video, to
test ads and movie trailers, something not possible over the
phone.

One company that has become a true believer is General Mills,
which last year conducted 20 percent of its research online. That
number is expected to grow to 60 percent next year, as the company
believes that by using the Web, it is saving as much as 50 percent
in costs, and speeding up the research process by up to 75 percent.
"Surveys that used to take four weeks can be completed in eight to
10 days," says Gayle Fuguitt, vice president of consumer insight at
General Mills.

However, as with many new techniques that challenge tradition,
not all marketers or researchers are convinced of the Internet's
utility in this field. Among the criticisms: Online research is
restricted to those who are already online, and that it doesn't
represent a broad cross section of Americans. "There's a lot of
hype out there on the supplier side, but still a lot of caution on
the buyer side," says Barry Goldblatt, executive director of
marketing research at Johnson & Johnson. "There are a lot of
questions still out there about this methodology."

Market research firms, both old and new, are utilizing unique
approaches in addressing some of the criticisms, and making
research on the Web more relevant than ever to marketers. Here's a
look at what some are doing.

The Nielsen of Web Surveys Knowledge Networks, which conducted
the Survivor poll for CBS, has created a panel of over 100,000
consumers from scratch. These consumers are each supplied with free
Web TV devices and monthly Internet access. The panel, which is
expected to grow to 250,000 by 2001, is chosen through random digit
dialing technique, which gives every household in the U.S. an equal
chance of being selected. This ensures that the panel is a
scientifically valid cross section of the U.S. population, allowing
Knowledge Networks to provide research information on any
particular portion of the consumer market, or the market in its
entirety, via their online surveys.

The creation of this reliable probability sample by Knowledge
Networks was one reason CBS News also hired them to conduct polls
on immediate public reaction to President Clinton's State of the
Union address last January and the Gore/Bush debates in October.
"As a news organization, we have specific requirements when it
comes to accuracy and speed; we have to put our name and reputation
on those polling results," says Frankovic.

What's more, the market research potential of this panel goes
way beyond surveys. Utilizing the Web TV device, Knowledge Networks
plans to start monitoring the television viewership and Web usage
of its panel, as well as tracking print media consumption through
surveys. Software loaded onto panelists' home computers will be
able to track Web surfing there as well. In addition, Knowledge
Networks announced in September, the acquisition of Promotions
Decisions Inc., a company which monitors consumer purchase patterns
in supermarkets. These moves will allow the company to provide a
"360 degree" view of consumer attitudes, brand preferences,
opinions, demographics, interests, hobbies, television viewing, Web
surfing, purchase intentions, and actual purchases, all from a
single source of panelists.

"Eventually we will have thousands of data points on each of our
panelists," says Catherine Edwards, vice president of marketing at
Knowledge Networks. This mountain of detailed data will be a gold
mine of insight into consumer behavior and thought, offering
marketers an almost "Big Brother" peek into the minds of consumers.
A company that was seeking to launch a new skin care toner, for
example, could test new concepts through an online survey, and
analyze the types of people most likely to try a new product.
Different advertisements and packaging could be tested on the most
receptive group, and data on the media outlets and Web sites
favored by the group could be compiled. Once the product was
launched, the effectiveness of the marketing and the actual number
of purchases being made of the product-and by whom-could also be
tracked. All from one statistically reliable data source.

Nice 'n Easy InsightExpress takes a different approach. Rather
than attempting to create a system to integrate the offline
population into its sample, the 1-year-old company is using the
speedy and economical data collection capabilities of the Web to
provide inexpensive, automated, do-it-yourself research. With
prices starting at $450, and surveys completed in 6 to 7 hours,
InsightExpress is leveraging the power of the Web to bring market
research abilities to companies that previously may not have
considered it as a viable business tool. "We want to make market
research as pervasive as Microsoft Excel," says Charles Hamlin,
president and COO. "Let's bring some consumer input into every
important business idea and decision."

While Hamlin agrees that you can't use Web surveys to conduct
research on the population at large, he points out that there are
plenty of marketers and research projects for which an Internet
sample is adequate, or even desirable. "If you are Volvo, do you
really care about people making under $30,000 who are not online?"
he asks. "The online world can provide a representative sample of
many populations, for many clients who are seeking a certain
demographic." This is especially true for dot-com companies, who
are usually only interested in the opinions of the online
population.

Clients design their own surveys with help from templates on the
InsightExpress Web site. Respondents are recruited by Hamlin and
his team, through banner ads on targeted Web sites, and then
screened to obtain the desired demographics. The automated nature
of the service keeps costs down, and clients can often start
receiving responses to a survey within minutes of downloading to
Insight's servers. "The speed of this type of research is
unbelievable," says Lisa Manuzza, director of research at iWon.com,
a portal site. "And the cost of these surveys is such that I can
test 10 times as many ideas as I could with traditional research."
In fact, in her most recent study, Manuzza used 34 cells, whereas
with a more expensive survey she might have only used three or
four. As a result, iWon.com recently moved forward with a concept
that they probably would never have tested before the advent of
InsightExpress.

Better Surveys through Science? Not every online research firm
believes that the sample used in online research precludes surveys
that can reflect the population at large. Harris Interactive
differs from Knowledge Networks and Insight- Express in that
company executives believe they can accurately weight the results
of online polls to incorporate the offline world into their
findings, using a statistical technique called "propensity score
adjustment."

"We can take all the speed, cost, and interactive advantages of
Internet research and use weighting to provide high-quality data on
both the online and offline populations," says George Terhanian,
vice president for research and methodology at Harris
Interactive.

Each month, Harris runs parallel telephone and Internet surveys,
where they compare a representative sample of the U.S. population
with the panel of 6.6 million people the company has recruited to
take part in their online surveys. Using analysis of these two
identical surveys, Harris weights its online surveys for that month
to reflect the general U.S. population, using demographic figures
obtained from the Census Bureau's `Current Population Survey."

While some in the research community are not convinced that
Harris Interactive's methodology is valid, Paul Rosenbaum, an
expert professor in the area of propensity score adjustment at the
Wharton School of the University of Pennsylvania, believes it is
theoretically sound. However, Rosenbaum warns: "How successful you
are depends on whether or not you can observe all the variables
involved." With the many factors involved in understanding who
comprises the offline and online populations, this could be a
tricky proposition.

Whether or not Harris Interactive is completely successful in
applying propensity score adjustment in its work may be debatable.
But the company's methodology passes muster with a growing number
of clients. Last year Harris was the fastest growing major research
firm in the U.S., with revenue up 34.2 percent over 1998.

The contrasting approaches taken by different research firms
have their supporters and detractors, but almost everyone in the
online research business agrees that the future of the industry is
on the Internet. Larry Gold, editor of Inside Research, estimates
that in the next three years as much as 60 percent to 80 percent of
research will be conducted via the Web. This should allow enough
leeway for each company's approach to serve marketers and their
various needs and budgets.

Now if they could only do something about moving all those
telemarketing calls onto the Web too.